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NIAC Policy Memo: The Iran Export Embargo Act (S. 1001)

None of the 19 cosponsors of Senator Cornyn’s (R-TX) bill are Democrats, likely because the bill eliminates the President’s authority to manage the risks associated with imposing sanctions on countries importing Iranian oil.

Removes the President’s National Security Waiver

The Iran Export Embargo Act removes the President’s ability to waive sanctions when doing so is in the national security interests of the United States.

Under existing law, the President may waive for 120 days the application of penalties for a sanctions violation if he determines it is in the national security interest of the United States.

The Iran Export Embargo Act removes the President’s ability to respond to an oil shock and to ensure that sanctions on Iran do not significantly increase oil prices.

Under existing law, the President may waive application of sanctions if the price and supply of petroleum produced in countries other than Iran is not sufficient to permit purchasers of petroleum from Iran to reduce significantly the volume of their purchases from Iran.

Removes the Cooperating Country Waiver; Risks Angering Allies

The Iran Export Embargo Act would require the President to sanction any entity that imports Iranian oil within 180 days, without regard for whether such reductions are realistic or feasible.

Under existing law, countries are excluded from the prohibition on transaction with Iran’s central bank if those countries significantly reduce their purchases of Iranian oil over every 180 day period.

Makes Lifting Sanctions Nearly Impossible; Setting the U.S. and Iran on Path to War

By removing all waivers and failing to provide sunset criteria, the bill would make it nearly impossible to lift sanctions. Given the difficulty in reaching bipartisan Congressional consensus on any issue, the prospects of Congress passing legislation to remove sanctions on Iran are extremely bleak.

With no prospect for lifting oil sanctions, there would be no incentive for the Iranian regime to continue negotiations with the international community and the view within the Iranian government that the U.S. is seeking regime change would be strengthened. This would increase both the risk of war and that the Iranian regime would attempt to break out of the IAEA inspections regime to build a nuclear weapon.

Blocks Humanitarian Trade with U.S. Companies

The provision that mandates theblocking of all property in which the Government of Iran has an interest may make it impossible for U.S. companies and their foreign subsidiaries to carry out humanitarian trade with Iran. The provision requiring the blocking of property of the Government of Iran could result in these funds being frozen as they are repatriated to the United States or to a U.S. company’s foreign subsidiary. Because the blocking of property does not indicate that this is pursuant to the International Emergency Economic Powers Act, the humanitarian exemptions contained in the Iranian Transactions and Sanctions Regulations would not apply.

The expansive definition of the Government of Iran would implicate many of Iran’s major importers who are owned by quasi-governmental organizations, and would prevent transactions with Iran’s Ministry of Health and Medical Education.

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National Iranian American Council

NIAC Action is dedicated to building political power for the Iranian-American community to advance peace & diplomacy, secure equitable immigration policies, and protect the civil rights of all Americans. NIAC, the 501(c)(3) sister organization of NIAC Action, is dedicated to educating & engaging the Iranian-American community in order to further advance these priorities.